Citing soft demand in the weakening global economy, Whirlpool Corp. on Oct. 28 announced it would slash more than 5,000 jobs in North America and Europe and reduce capacity.
The company said the action would reduce its workforce in the regions by 1%, and included the elimination of 1,200 salaried jobs. Whirlpool, among the biggest appliance makers with a global portfolio of brands including Maytag, KitchenAid, Brastemp and Consul, did not break down the number of job cuts by location.
As part of the belt-tightening, Whirlpool said it would close a refrigeration manufacturing plant in Fort Smith, Arkansas, by the middle of next year, and relocate dishwasher production from Neunkirchen, Germany, to Poland in January.
The company said it was taking steps to reduce overall capacity production by about six million units as it reported third-quarter earnings that reflected lower operating profit.
"Our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs," said Jeff Fettig, Whirlpool CEO.
The Benton Harbor, Mich.-based company reported operating profit fell 42% from the 2010 third quarter, to $136 million.
Net profit more than doubled in the July-September period, to $177 million, while sales climbed 2% to $4.6 billion.
Whirlpool estimated its cuts and other moves would result in $400 million in annual cost savings by the end of 2013.
"We are taking necessary actions to address a much more challenging global economic environment," said Fettig.
"We believe our cost and capacity reduction initiatives, recently announced cost-based price increases, and innovative product launches will enable us to expand operating margins and deliver long-term value to shareholders."
Copyright Agence France-Presse, 2011